Still, any number less than 50 shows that more builders consider sales conditions to be poor than good.

Measures of sentiment toward current sales conditions and prospects over the next six months both stayed the same at less-than-optimistic levels. Confidence levels improved in three regions and stayed the same in the Northeast, but remain depressed.

Builder reports of prospective buyer traffic soared five points to 35 – the gauge’s highest point since April 2006.

“The concern is that, even though demand for new homes is rising, overly tight credit conditions are still constraining new building and new purchases at a time when that kind of economic activity and the job growth it generates are greatly needed,” said Barry Rutenberg, chairman of the home builders group, in a statement.

In the Southland, a major dip in foreclosed homes helped push up home prices in September. Foreclosed homes made up a sixth of the region’s resale market – the lowest level in nearly five years.

Median home prices climbed to a four-year high, but a supply squeeze caused sales to plummet in Southern California in September. Inventory of lower-priced homes shrank by more than 40% over the last year.